Nifty 17101.95 (-0.05%)
Sensex 57200.23 (-0.13%)
Nifty Bank 37689.4 (-0.77%)
Nifty IT 33851.95 (1.13%)
Nifty Financial Services 17673.55 (-0.50%)
Adani Ports 710.15 (0.15%)
Asian Paints 3110.85 (-0.20%)
Axis Bank 764.70 (-1.18%)
B P C L 382.50 (0.08%)
Bajaj Auto 3497.20 (-0.11%)
Bajaj Finance 6867.25 (0.44%)
Bajaj Finserv 15198.75 (-1.05%)
Bharti Airtel 715.80 (1.21%)
Britannia Inds. 3509.65 (0.44%)
Cipla 932.25 (0.50%)
Coal India 161.65 (0.69%)
Divis Lab. 3940.70 (0.02%)
Dr Reddys Labs 4218.60 (-0.89%)
Eicher Motors 2610.95 (-1.24%)
Grasim Inds 1697.00 (0.59%)
H D F C 2516.50 (0.53%)
HCL Technologies 1080.45 (0.25%)
HDFC Bank 1463.25 (-0.79%)
HDFC Life Insur. 620.45 (-0.17%)
Hero Motocorp 2672.15 (-1.58%)
Hind. Unilever 2283.55 (-0.51%)
Hindalco Inds. 490.35 (0.25%)
I O C L 124.10 (1.14%)
ICICI Bank 781.15 (-1.70%)
IndusInd Bank 903.55 (1.74%)
Infosys 1686.20 (0.45%)
ITC 217.60 (1.40%)
JSW Steel 628.05 (0.31%)
Kotak Mah. Bank 1898.30 (0.48%)
Larsen & Toubro 1897.55 (-0.70%)
M & M 869.65 (1.35%)
Maruti Suzuki 8550.95 (-3.05%)
Nestle India 18384.40 (-0.01%)
NTPC 140.15 (3.81%)
O N G C 168.80 (1.87%)
Power Grid Corpn 210.20 (-2.16%)
Reliance Industr 2335.85 (-0.10%)
SBI Life Insuran 1205.55 (-0.50%)
Shree Cement 24124.70 (0.68%)
St Bk of India 523.45 (-1.04%)
Sun Pharma.Inds. 827.35 (1.88%)
Tata Consumer 717.90 (1.69%)
Tata Motors 497.30 (0.59%)
Tata Steel 1084.65 (-0.34%)
TCS 3690.05 (1.12%)
Tech Mahindra 1410.65 (-2.42%)
Titan Company 2315.60 (0.24%)
UltraTech Cem. 7109.85 (0.13%)
UPL 790.25 (2.37%)
Wipro 552.15 (1.36%)

Introduction

Every trader wants be to on the winning side of the game i.e. buy low and sell high or sell high and then buy lower. However, the volatility in the stock market makes it extremely difficult for a trader to execute this on a consistent basis. Some positions may not take place as desired for a trader. One strategy that a trader could consider in order to overcome volatility is averaging his positions.

Averaging is not restricted to losing trades alone, it works both in rising and falling markets. In a rising bull market, the cost of new unit acquired reduces due to averaging, wherein the holding is increased incrementally backed by strong fundamental factors like consistent revenue growth, increase in PAT, etc. While in a falling market, averaging reduces the cost of loss-making units purchased at higher prices.

In this section, we will learn about the various averaging strategies a trader can consider in different market environments for different market products.

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